AOKANG'S International Net Profit Has Fallen By More Than 20% In 3 Years, And Wang Zhentao'S Father And Son Cash In 620 Million.

Wang Zhentao, who is undertaking third business ventures, is faced with more difficult challenges.

31 years ago, after 3 years of carpentry and 5 years of promotion, Wang Zhentao, a Wenzhou native of Zhejiang, first started her own business. Relying on the 30 thousand yuan principal raised by her relatives, he developed a family workshop to become the largest private shoe making enterprise in China. The leading brand of AOKANG leather shoes has become the trademark of China's leather shoes industry.

In 2012, AOKANG shoes landed on the Shanghai stock exchange, which was called AOKANG International (603001.SH).

However, under the impact of the Internet tide, AOKANG international failed to withstand the impact.

From 2016 to 2018, although the annual operating income was stable at the level of 3 billion yuan, net profit (net profit attributable to shareholders of listed companies) showed an accelerating downward trend, with an average annual compound growth rate approaching -30%.

In the first quarter of this year, the net profit of the revenue decreased twice.

The company achieved operating income of 736 million yuan, down 15.23% compared to the same period last year, net profit of 79 million 139 thousand and 200 yuan, a decrease of 33.68%.

In addition, AOKANG's international business data also exist "pressing the gourd floating gourd" phenomenon.

In the past two years, the effect of inventory clearance is obvious, but due to the relaxation of dealer account behavior, the company's accounts receivable continued to rise.

The concern is that as of now, the controlling shareholder AOKANG holding and real controller Wang Zhentao equity pledge rate of more than 90%.

Last year, Wang Zhentao and his son, who had never been reduced, cash 625 million yuan.

Last week, the Yangtze daily news sent an interview letter to AOKANG international in response to the decline in profitability.

Inventories decreased by 25%, accounts receivable increased by 46%.

AOKANG International's net profit fell back 10 years ago.

A quarterly report shows that in the first three months of this year, AOKANG international achieved operating income of 736 million yuan, down 15.23% from the same period last year, with net profit of 79 million 139 thousand and 200 yuan, down 33.68% from the same period last year.

Declining earnings from both operating and net profits indicate that there is no sign of a decline in the company's performance.

This decline in AOKANG international began in 2016.

In this year, the company achieved 3 billion 250 million yuan, a slight drop of 2.07% compared with the previous year, while the net profit fell to 21.79% and the net profit was 305 million yuan.

In 2017, business income rebounded slightly to 3 billion 262 million yuan, an increase of 0.36%, and net profit dropped by 25.80%.

Last year, operating income and net profit staged a "double kill", operating income of 3 billion 43 million yuan, down 6.70% compared with the same period last year, net profit 137 million yuan, a decrease of 39.53%.

In the three years, net profit decreased by nearly 30% annually.

During this period, net profit after deducting non recurring gains and losses was 321 million yuan, 182 million yuan and 91 million yuan respectively, representing a decrease of 8.43%, 43.31% and 50.04% respectively.

Whether net profit or non net profit was the biggest drop last year.

From the four quarter of last year, operating income was 868 million yuan, 705 million yuan, 609 million yuan, and 862 million yuan respectively. The 14 quarter was flat, with a decrease in the two or three quarter and seasonality.

The corresponding net profit is 119 million yuan, 49 million yuan, 43 million yuan, and 35 million yuan, and the net profit is 111 million yuan, 27 million yuan, 5 million yuan, 42 million yuan, and the profitability has been declining continuously.

In terms of weighted return on net assets, AOKANG international was 9.79% in 2015, followed by a three drop in last year, 3.40% last year, and 1.98% in the first quarter of this year.

However, the overall gross profit margin of the company's products is relatively stable in general.

2015 was 33.72%, from 2016 to 2018 was 37.09%, 36.27%, 35.74%, and 38.19% in the first quarter of this year.

However, net interest rate fell significantly, 11.75% in 2015, down three consecutive years, 4.48% last year.

In addition, the decline in net profit last year is closely related to asset impairment.

Last year, the company prepared 35 million 643 thousand and 600 yuan for bad debts and 22 million 672 thousand and 300 yuan for inventory depreciation. In addition, it also made a provision for long-term equity investment impairment of 18 million 992 thousand and 400 yuan.

In 2015, the company invested $77 million 340 thousand into the US stock company's Lanting Pavilion rally. By the end of last year, the book investment balance was 303 million yuan.

The three superposition mentioned above affected 77 million 308 thousand and 300 yuan net profit in that year.

It is worth noting that with the advent of the electricity supplier era, AOKANG international inventories, which were sold through traditional mode, grew faster. In 2015, it was 919 million yuan and increased to 1 billion 37 million yuan in 2016.

There is no doubt that as the production of leather shoes enterprises, high inventory has a large risk of falling prices.

In the past two years, the company has accelerated the layout of the electricity supplier and the intensity of its stock taking. The effect is more obvious.

By the end of last year, inventories were reduced by 266 million yuan, or 25.65%.

However, in order to get rid of inventory, the company relaxed the account period for the dealers, resulting in a large increase in accounts receivable.

By the end of last year, accounts receivable was 1 billion 181 million yuan, an increase of 373 million yuan from 808 million yuan at the end of 2016, an increase of 46.16%.

Large shareholder and real controller over 90% equity pledge

Wang Zhentao, who is actively promoting AOKANG's international industrial upgrading to cope with the decline in performance, seems to be facing financial pressure.

Wang Zhentao said publicly that AOKANG international has gone through 30 years, and the 10 years of joint venture have been promoted by franchised stores, and 20 years have been promoted by chain stores.

At present, the company is undergoing pformation and upgrading. In the next 30 years, it will operate through amoeba, that is, the "Hawk model" continues. Wang Zhentao calls it the third venture.

Whether this model is suitable for AOKANG will be tested in time and market.

Simply from AOKANG International's earnings report, the company has deeply ploughed shoe making industry for 30 years, and its industrial structure is also relatively simple.

In fact, Wang Zhentao's industry is more than that.

As AOKANG group did not introduce its specific industrial layout, but from sporadic public information can be found, Wang Zhentao has been involved in biopharmaceutical, commercial real estate, in addition to finance, invested 198 million yuan to participate in the establishment of a private bank in Wenzhou.

Biopharmaceutical, commercial real estate and shoemaking industries go hand in hand, but only how the top two industries operate.

However, Wang Zhentao frequently drew blood from AOKANG international or could see its financial pressure.

In January 26, 2013, AOKANG international listing was less than one year. The controlling shareholder AOKANG investment began to implement equity pledge financing, and the pledge rate continued to rise.

Up to now, AOKANG has invested 111 million shares in the company, accounting for 27.73% of the total share capital, 104 million shares in pledge and 93.17% in pledge.

Real controller Wang Zhentao also has a high proportion of pledge equity.

Up to now, Wang Zhentao has directly held 61 million shares of AOKANG international, accounting for 15.10% of the total share capital, 60 million shares of pledge, and the rate of pledge is as high as 98.45%.

Wang Zhentao holds 90% stake in AOKANG Investment Holdings, and his son Wang Chen holds 10% stake.

Prior to that, Wang Chen also directly held 9.98% stake in the company.

The risk of such high pledge rate is obvious.

AOKANG international issue price of 25.50 yuan / share, in June 15, 2015 has chanted to 55.58 yuan peak, in May 17th this year, closed at 10.34 yuan.

In the past 8 years, the company's share price has not only fallen below the issue price, but has fallen by 59.45%, and its market value has evaporated by only 15 billion 700 million yuan.

The concern is that Wang Zhentao and his son, who have not implemented the reduction, have moved.

Last year, AOKANG Investment Holdings pferred 5% of the shares to the natural person Xu Yongkun. Wang Chen pferred the 9.98% equity agreement to the natural person, and the discount rate was 9%, which amounted to 625 million yuan.

At this point, Wang Chen completed clearance.

The company did not disclose the whereabouts of the cash.

In late March of this year, Xu Yongkun first reduced the 0.5% stake in the two tier market, withdrew from the important shareholder of the company and cash in 24 million yuan.